State Bank Of India Rallies Over 4% On Lowering Interest On Home Loans

State Bank Of India Rallies Over 4% On Lowering Interest On Home Loans

Shares of the country's largest lender, State Bank of India, rose as much as 4.2 per cent to hit an intraday high of Rs 462.50 after it lowered interest rate on home loans to 6.70 per cent. State Bank of India is offering credit score linked home loans at 6.70 per cent - irrespective of the loan amount, according to a statement shared by the bank today. Meanwhile, State Bank of India shares were witnessing very high trading volumes as 13.32 lakh shares changed hands on the BSE compared with an average of 6.42 lakh shares traded daily in the past two weeks. On the National Stock Exchange 3.57 crore shares changed hands.

Earlier, a borrower availing a loan greater than Rs 75 lack, had to pay an interest rate of 7.15 per cent, but with the introduction of the festive season-related offers, a borrower can now avail a home loan for any amount at a rate of 6.70 per cent, said SBI in its statement.

The festive season's offer results in a saving of 45 basis points (bps) which translates to an interest saving of more than Rs 8 lack, for Rs 75 lack loan with a tenure of 30 years. Also, the rate of interest applicable for a non-salaried borrower was 15 bps higher than the interest rate applicable to a salaried borrower.

The state-run bank has removed the distinction between a salaried and a non-salaried borrower. This means that now there is no occupation-linked interest premium being charged to the prospective home loan borrowers. This will lead to a further interest saving of 15 bps to the non-salaried borrowers.

As of 3:06 pm, State Bank of India traded 3.88 per cent higher at Rs 461,outperforming the Sensex which was up 0.8 per cent.